NEW YORK: Luxury brands need to put more emphasis on social media and its quickly evolving platforms to engage future consumers in the Millennial demographic, according to Abrams Research.
The social media agency's 2012-2013 Luxury Guide reports that consumers who connect with a brand on social media spend 20% to 40% more money than those who don't. It also states that young, affluent consumers care more about a brand's narrative than its price tags.
“Luxury brands are in a sometimes difficult spot in that they want to be exclusive and remain exclusive, and yet social media is inherently all about accessibility,” said Dan Abrams, CEO of the company.
He added that compared to 18 months ago when few luxury brands were active in the social sector, all now realize that social media is a necessity, not an option.
The guide also reveals that 74% of consumers are more likely to buy from a company whose values are clearly defined in social media and 60% of Twitter users would recommend a brand they follow to a friend.
Lead strategist and MD at Abrams Research Keith Gormley said the key for luxury brands to build connections with consumers through social is by communicating their company stories. By providing “a valuable piece of content or something that contributes to the conversation consumers are having,” luxury brands are more likely to have success on social channels, he added.
Brands that aren't as successful on social media tend to be the ones that are focusing on selling products rather than telling stories and engaging fans, explained Gormley.
In the mobile space, the guide states that the m-commerce market is expected to grow 55% by 2016.
“The future of social media is going to be reaching the consumer where they are,” said Gormley. “We are seeing far fewer consumers accessing social media, websites, or any part of the Internet via desktop computer or laptop and far more often they are on their tablet or mobile phone.”
He added that the challenge going forward is going to be for all brands to figure out how to interact with consumers in real time, including before, during, and after events and product launches.